For the Financial Times, both parties “they have compelling reasons to want an agreement to restructure $44.5 billion in debt due to the ill-fated IMF bailout of Buenos Aires in 2018”. “Argentina’s economy is in dire straits, with inflation running above 50 percent a year, fueled by central bank money printing to finance an unsustainable budget deficit. Net international reserves are dangerously low and with payments of $19 billion to the fund due this year, default is a matter of time,” they argued.
“The IMF is willing to put behind the embarrassing failure of its biggest bailout in history, avoid the specter of Argentina falling behind on payments, and show sensitivity to the need for stronger social policies as countries rebuild after the pandemic”reads the article.
However, the Financial Times acknowledges that the government of Alberto Fernandez “He inherited a mess when he took over in 2019.” “The economy was mired in recession and the mountain of external debt accumulated by the previous president, Mauricio Macri, it was priceless. The IMF was wrong to lend so much in 2018 on overly optimistic assumptions without insisting on a restructuring of private debt and measures to prevent capital flight,” he admitted.
In another paragraph of the article he mentions the resignation of Máximo Kirchner from the presidency of the Frente de Todos bloc. “He speaks for a powerful faction that believes it is preferable not to agree with the IMF than to accept spending limits,” he notes of his resignation letter.
“Faced with such an unenviable task, it’s easy to see why the fund is willing to cut a new deal with Argentina with minimal strings attached. But to proceed without insisting on broader measures to address the economy’s fundamental structural problems is stretching and pretense. The IMF should think again,” concludes the text.
Source: Ambito
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